Recruiting Firms vs Internal HR: Measuring Benefits and Cost

Having the right people in place is perhaps the most important aspect of maintaining a well-run and successful organization. With this in mind, identifying and recruiting top talent is a component of company management that must be given top priority. Some companies choose to utilize an agency to handle recruitment, while others opt to do their recruiting, screening, etc. in-house. Each approach has its advantages and considering both will help make the decision easier.

Finding the Right Person for the Job

When it comes to understanding company culture, it’s tough to beat a dedicated in-house employee. A full time company member will have a special understanding of the nuances, expectations and norms of your organization, therefore offering a unique ability to screen candidates for fit. A member of an internal HR team may have a close working relationship with the manager or department head who will ultimately oversee the new hire, providing further insight. At the very least, the internal staff should be within arm’s length.

On the other hand, an external recruiter will usually bring a higher level of expertise to the table. Their livelihood depends upon having access to quality candidates and this becomes their sole focus. Where internal HR staff are often generalists, called upon to scout talent from various disciplines, full time recruiters often specialize in a particular industry, giving them a clearer grasp of the marketplace. As a result, they are more familiar with the technological requirements of a position and the aptitudes of a great candidate. Dedicated recruiters work with multiple organizations in different locations, helping them develop a more comprehensive picture of market trends.

“Many staffing firms specialize in hiring for particular jobs,” says strategist Dave Anderson. “They understand exactly what skills are required and know how to identify candidates with the right backgrounds. This knowledge allows them to move quickly since they don’t need to spend much time learning what the hiring manager is seeking.” [1]

It should go without saying that some of the most capable candidates out there are currently employed. Since a dedicated recruiter is only as good as the candidates they present, they spend a considerable amount of time ‘headhunting’ talent from other organizations. In-house recruitment efforts depend more heavily upon applications received from people proactively seeking jobs. While this can also net great results, it ultimately excludes a key group; talented individuals who would love to work for your organization but just don’t know it yet.

Anja Zojceska of Talent Lyft warns of the perils of a strategy that ignores the currently employed. “With the unemployment rate lower than ever, it’s a candidate driven market out there,” she says. “In a situation like this, your best job candidates are passive job seekers- they don’t actively look for a job, because they already have one. This means that posting your open job position on job boards is by no means enough to attract the best candidates.” [2]

A Matter of Finance

Recruiting can be expensive. If you’re going to be doing large amounts of it on a consistent basis, there may be a financial case to be made for avoiding recruiter fees by doing it in-house. Then again, when one considers the overhead involved in adding staff members to handle the recruiting role, the expenses accumulate quickly. Outsourcing your recruiting needs means that you won’t be paying for vacation pay or office furniture, at least not directly. Furthermore, you’ll only pay for recruiting when you need it, as opposed to the ongoing expense of maintaining dedicated staff. When comparing the financial implications of in-house vs. external, these are the most direct factors but they are not the only considerations to make, which leads me to my next point.

Get ‘Er Done

Due to the singular focus of external recruiters, they can usually be counted upon to fill the role faster than an in-house staffer. When it’s imperative to move forward, there is true value in expediency.

It’s also important to remember that recruiters don’t just find candidates, they also complete background and reference checks, schedule interviews, conduct offer negotiations and more. This will alleviate your HR staff of a tremendous burden, providing further value.

The Voice of Reason

It can prove beneficial to have a mediator between prospective employer and employee. An external recruiter can be seen as an impartial entity that should be able to create a closer relationship with both parties. This could help both clients and candidates to feel their interests are safeguarded by the recruiter. For this reason they both may feel more inclined to share their concerns or feedback with the external Recruiter versus directly with each other.

Each company is different and, in the end, must consider their own unique situation before choosing between external and internal recruiting efforts. Suffice to say, however, that an agency can provide an excellent option when staffing needs arise, at a price that, given careful analysis, is not out of line.

Alessia Pagliaroli graduated with a Masters Degree in Communication at Siena University in Italy. She has over 13 years of experience in the recruitment industry. Her areas of focus are Marketing, Engineering, Construction Management, Consumer Wholesale, Technology & IT Sales, Supply Chain & Logistics.